“If you make customers unhappy in the physical world, they might each tell 6 friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.”
Dear Readers, for the past two weeks, I have looked at the reason why branches still matter in this digital age of banking. Since we live in a global village and not on an island, it is imperative that our banking services continue to be need-based. Although we cannot remain in our slumber of high illiteracy levels and financial ignorance, the new global trends in digital banking are also a must-have pillar to stand upon to meet the tidal wave and influx of highly sophisticated and financially savvy customers.
The Customers’ Remarks about branch closures
Looking at the remarks made by the various bank customers, we realize that some of them are really in the high-end when it comes to digital banking, while others are still stuck with illiteracy and financial ignorance. Both sides of the divide expressed their genuine feelings. Closing some branches is a definite move, but finding suitable and still highly effective facial interaction for those who need it, is also a must-have.
My Personal Groupings of Bank Customers (continued)
This week I continue my personal groupings of the customers. It sounds humorous but don’t laugh at me. They are real. I described three groups last week – The Stark Illiterates, The High Net-worth and The Instant Coffee generation, (which I compared to the millennials of USA). As intimated last week, these are my personal opinions so please pardon me. I mean no offence.
The Literate Senior Citizen Group (Born Before Computer, or BBC)
These customers are mostly retired workers, who like the security of bank managers, tellers behind enclosures, face to face interaction with front desk staff, etc. They are usually professionals like doctors, lawyers, teachers, nurses, ambassadors, security personnel, public servants and others mostly born before the computer age. They jokingly call themselves BBC, but are proud of their achievements in their careers and always ready to chat with the branch staff. They write cheques to pay most of their bills and always check their recent transactions to ensure everything is on track. Their cheque books’ stubs are always completed to ensure regular reconciliation of their transactions. If they need cash, they will go to the branch and withdraw money from inside the bank. They are uncomfortable with direct deposit or electronic banking. Most customers of the BBC group never used computers at work or at home. However they are distinguished citizens of the country, very well organized and appreciate branch banking.
These customers are very patient, may be receiving their pensions and other receivables through the bank, and investing in term deposits to enjoy their dividends.
The Middle-Aged Associates
These are usually between 45 and 60 years. We jokingly call them “Associates” of the branch because they have actually seen it all. They have a firm grasp of both the traditional and the digital banking. They are usually well connected to staff and sometimes the bank management personnel, and feel very much at home in the branch. These customers like personal connections and enjoy having one-on-one conversations with the branch staff. They are never in a hurry, and might not notice the queue they leave behind. Since they always keep in touch, and even inform you when travelling, their accounts are easier to maintain. As opinion leaders, they are also a force to reckon with.
The Role of Branch Staff in Managing Risk
In the advanced countries, despite the fact that most customers interact with their banks primarily through digital channels, most banks still manage customer relationships through branch-centric models. The branch is where accounts are domiciled, where sales are recorded, and, accordingly, still treated as the seat of customer relationships.
Banks are therefore profiling their customers and changing the role of their branch staff to better meet the needs of digital customers and their changing behaviours. With the dwindling need for tellers and other front end staff, the re-tooling of branch staff to best meet these new needs of customers is the driving force for the digital channel success. Let us look at how banks can blend these roles in our part of the world where customers’ education and financial literacy is woefully low:
- In-house education of branch staff on new customer expectations, the available digital channels, their features and benefits, and the best suitable for each customer. There is no one-size fits all solution. If the staff are not digitally savvy themselves, then they cannot cross-sell. To empathize with and serve digitally-focused customers, branch staff need to use digital channels themselves.
- Customer education about the various channel capabilities during the process of account opening.
Let us look at each group and the special attention they require:
The Illiterates: Regular education about the dynamics in banking is a must for such customers. However, without formal education, it is difficult for them to appreciate the digital banking world. They are a source of cash for banks and the relationship needs to be kept. For traders, gradual introduction of POS systems can be recommended only if they have a capable agent or assistant. We are trying to educate customers to reduce their over-reliance on cash, but without assistance at their shops how can they use the machines? Moreover, these agents who assist them with their banking transactions, must be handled with caution, considering the numerous claims made on banks for conversion, wrongful debits and negligence.
The Instant Coffee Generation: They are the main source of banks’ future revenues. They only enter the banks for account opening, loan requests or report complaints. They believe they are better off doing virtual banking anywhere convenient and just like every customer, must have the systems and facilities ready and functioning when needed. They do not have patience for bureaucracy and processes and can spread both good and bad service about their bank, very fast on social media, so branch staff should beware and sit up.
Product bundling for such persons are the best, but do not let the impatient ones among them let you lose guard during KYC and account opening because looking for them when there is a problem becomes another hurdle to jump. Bio-data collection among this group is never to be compromised and on-board calling and checks on them should be confirmed. Please get the necessary indemnities and terms and conditions associated with virtual banking properly communicated and signed off, because you may not see the person in a long while. As a good potential for growth business, digital banking is the ideal for them. Offer them the best and they will advocate and tell the whole world about your service, both physically and on-line.
The Elite and High Net-worth customers: As recommended last week, this group must not be taken for granted because a high percentage of them are financially savvy and use on-line data to make investment decisions. Due to the premium services they demand and pay for, they are to be catered for with dispatch. The elderly ones among them are a delight to work with. Sometimes they even treat you as one of their children and take the relationship to another interesting level. Please remember their anniversaries, attend their social invitations and related programs. They can easily move large volumes of cash from your bank to your competitor when the proffered services are unsatisfactory. On the other hand, those who are not very financially literate should be updated regularly on banking policies, and their transactions monitored closely to keep their accounts safe. They are a target for fraudsters who clone their cheques and sometimes hack into their emails for cyber-crime and frauds. Delightful service to them creates loyalty, with long-lasting and fruitful relationships.
The BBC Group: This is a group who will continuously frequent the branches and enjoy the facial interaction. There should be dedicated and pleasant-looking staff who will appreciate their concerns as well as update them with relevant bank policies to maintain their confidence in the banking system. They may be considered old fashioned, but don’t confuse old school with old. This customer just likes to see transactions take place, versus placing trust in unseen transactions. They need to be accorded the appropriate respect through the provision of the traditional banking experience, such as paper deposit receipts, sealed envelopes, and face-to-face teller interaction. To score extra points, make sure to address them with their appropriate titles!
I hope my take has been useful. By all means close unprofitable branches occupying large spaces, but keep small places and few staff for the customers whose needs are just as important as digital ones.
ABOUT THE AUTHOR
Alberta Quarcoopome is a Fellow of the Institute of Bankers, and CEO of ALKAN Business Consult Ltd. She is the Author of two books: “The 21st Century Bank Teller: A Strategic Partner” and “My Front Desk Experience: A Young Banker’s Story”. She uses her experience and practical case studies, training young bankers in operational risk management, sales, customer service, banking operations and fraud.